US businessman barred from leaving Mongolia; seeks help from Minn. congressional delegation

By STEVE KARNOWSKI
Associated Press

January 31, 2013 — 9:19pm

Anonymous, Associated Press - ApThis undated photo provided by Justin Kapla shows Kapla, president of SouthGobi Sands, a Mongolian mining company. The Minnesota native says he is being prevented from leaving Mongolia because he is a potential witness in a corruption case. is asking for help from the congressional delegation in his home state of Minnesota.

MINNEAPOLIS - An American businessman who says he is being prevented from leaving Mongolia, where he is considered a potential witness in a corruption case, has asked for help from the congressional delegation in his home state of Minnesota.

Justin Kapla is president and executive director of SouthGobi Sands LLC, a Mongolian mining company. He asked delegation members for assistance in lifting his travel ban, which he said was imposed because investigators consider him a witness in a corruption investigation of government officials involving the transfer of some of his company's minerals exploration licenses.

In an email exchange with The Associated Press, Kapla declined to talk on the record. He referred questions to his father in Minnesota, William Kapla, who provided a copy of his son's letter to Sens. Al Franken and Amy Klobuchar and Rep. Michele Bachmann.

"They're all working on it. All three of their offices are great," William Kapla, 72, of Forest Lake, said this week. He also said the U .S. Embassy has been talking to Mongolian officials.

Justin Kapla, 39, wrote that the events in question happened well before he went to work for SouthGobi Sands. He said the Mongolian agency conducting the investigation, the Independent Authority Against Corruption, has acknowledged that but told him he still couldn't leave because it would need to hold someone responsible if the investigation finds any wrongdoing by the company.

William Kapla told AP his son grew up in Elk River, is married to a Mongolian woman and has two children, all of whom are with him. He said his son is free to work and move around Mongolia but can't leave.

"Would you want to sit in a country with an exit ban so you couldn't leave? What if an emergency happened at home?" William Kapla said.

Mongolia's economy is in the midst of a mining boom that has been criticized as benefiting foreigners and the connected few. A new government was elected last year, promising Mongolians greater benefits from the country's mineral wealth.

Justin Kapla's company has seen its standing with the government erode. Last spring, SouthGobi Resources Ltd., the parent company of SouthGobi Sands, tried to sell a controlling stake to China's state-run Aluminum Corp. of China. The move would have effectively given the Chinese company control of a large coal deposit. It was dropped amid opposition from a government long fearful of economic dominance by its large southern neighbor.

Amid the ferment, the anti-corruption authority began investigating the government's Mineral Resources Authority and its former chairman, Dorjpurev Batkhuyag, an adviser to a former prime minister whose party lost power in the June election. Batkhuyag was accused of bribery and other corruption. He was convicted this week and sentenced to 6 1/2 years in prison.

Among Batkhuyag's misdeeds, the authority alleged, were dealings with SouthGobi Sands. Five of the company's licenses were to have been suspended because the company failed to spend sufficient funds exploring the areas, but instead Batkhuyag's office returned most of the licenses to SouthGobi and transferred one to a private Mongolian company controlled by friends.

Klobuchar's office said it is working with the family and the U.S. Embassy in Mongolia but declined to provide further details. Franken's office said it has also been in touch with the family. In Washington, a State Department official said the agency was aware of Kapla's case and providing appropriate consular assistance to him. The official spoke on condition of anonymity because he was not authorized to discuss the matter publicly due to privacy concerns.

Mongolia's anti-corruption authority declined public comment on Kapla or when the exit controls might be lifted.

Kapla's case was first reported by Jon Springer, a freelance journalist and financial blogger.

Washington has become the first U.S. state to sue the agrochemical giant Monsanto over pervasive pollution from PCBs, the toxic industrial chemicals that have accumulated in plants, fish and people around the globe for decades. The company said the case "lacks merit."